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AutoZone (AZO) to Report Q2 Earnings: Is a Beat in Store?
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AutoZone, Inc. (AZO - Free Report) is slated to report second-quarter fiscal 2018 (ended Feb 10, 2018) results on Feb 27, before the market opens.
The company’s earnings grew 6.8% year over year and surpassed the Zacks Consensus Estimate last quarter. AutoZone delivered a negative average earnings surprise of 1% for the trailing four quarters. AutoZone has a long-term growth rate of 13.2%.
In the last three months, AutoZone’s shares have outperformed the industry. The shares have gained 12.3% compared with the industry’s growth of 8.7%.
Let’s see how things are shaping up prior to this announcement.
According to our quantitative model, chances of AutoZone beating the Zacks Consensus Estimate in the second quarter are high. This is because, it has the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Earnings ESP for AutoZone is +3.95%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $9.16 and $8.82, respectively.
Zacks Rank: AutoZone carries a Zacks Rank #2 (Buy). This, when combined with a positive ESP, makes us reasonably confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
What’s Driving the Better-Than-Expected Earnings?
AutoZone utilizes cash flow for opening new stores every year and they also aggressively repurchase shares. During first-quarter 2018, AutoZone opened 16 new stores, relocated one and closed another in the United States. The company also opened five new stores in Mexico. As of Nov 18, 2017, the company had 5,480 stores across 50 states in the United States, the District of Columbia and Puerto Rico; 529 in Mexico; 26 Interamerican Motor Corp. branches and 14 stores in Brazil. The total store count was 6,049 as of the same date. Domestic store openings are likely to continue in the soon-to-be-reported quarter. This is likely to have some positive impacts on results.
The company has ample liquidity to repurchase shares without compromising financial strength as well as its credit ratings. In the first quarter of fiscal 2018, AutoZone repurchased 597,000 shares for $353 million, reflecting an average price of $590 per share. The company had shares worth $471 million remaining for repurchase at the end of the fiscal. The company is focused on enhancing shareholder returns, while simultaneously maintaining adequate liquidity for its business strategies.
Stocks to Consider
Here are a few stocks worth considering. As per our model, these comprise the right combination of elements to come up with an earnings beat this time around:
Sonic Automotive, Inc. (SAH - Free Report) has an Earnings ESP of +2.42% and a Zacks Rank #2. The company’s fourth-quarter 2017 financial results are expected to be released on Feb 27.
CarMax, Inc. (KMX - Free Report) has an Earnings ESP of +3.72% and a Zacks Rank #3. The company’s financial results are expected to be released on Apr 5.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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AutoZone (AZO) to Report Q2 Earnings: Is a Beat in Store?
AutoZone, Inc. (AZO - Free Report) is slated to report second-quarter fiscal 2018 (ended Feb 10, 2018) results on Feb 27, before the market opens.
The company’s earnings grew 6.8% year over year and surpassed the Zacks Consensus Estimate last quarter. AutoZone delivered a negative average earnings surprise of 1% for the trailing four quarters. AutoZone has a long-term growth rate of 13.2%.
In the last three months, AutoZone’s shares have outperformed the industry. The shares have gained 12.3% compared with the industry’s growth of 8.7%.
Let’s see how things are shaping up prior to this announcement.
AutoZone, Inc. Price and EPS Surprise
AutoZone, Inc. Price and EPS Surprise | AutoZone, Inc. Quote
A Likely Positive Surprise?
According to our quantitative model, chances of AutoZone beating the Zacks Consensus Estimate in the second quarter are high. This is because, it has the right combination of the two key ingredients, a positive Earnings ESP and a Zacks Rank #3 (Hold) or better, which is required to increase the odds of an earnings beat.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks ESP: Earnings ESP for AutoZone is +3.95%. This is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $9.16 and $8.82, respectively.
Zacks Rank: AutoZone carries a Zacks Rank #2 (Buy). This, when combined with a positive ESP, makes us reasonably confident of an earnings beat.
Conversely, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.
What’s Driving the Better-Than-Expected Earnings?
AutoZone utilizes cash flow for opening new stores every year and they also aggressively repurchase shares. During first-quarter 2018, AutoZone opened 16 new stores, relocated one and closed another in the United States. The company also opened five new stores in Mexico. As of Nov 18, 2017, the company had 5,480 stores across 50 states in the United States, the District of Columbia and Puerto Rico; 529 in Mexico; 26 Interamerican Motor Corp. branches and 14 stores in Brazil. The total store count was 6,049 as of the same date. Domestic store openings are likely to continue in the soon-to-be-reported quarter. This is likely to have some positive impacts on results.
The company has ample liquidity to repurchase shares without compromising financial strength as well as its credit ratings. In the first quarter of fiscal 2018, AutoZone repurchased 597,000 shares for $353 million, reflecting an average price of $590 per share. The company had shares worth $471 million remaining for repurchase at the end of the fiscal. The company is focused on enhancing shareholder returns, while simultaneously maintaining adequate liquidity for its business strategies.
Stocks to Consider
Here are a few stocks worth considering. As per our model, these comprise the right combination of elements to come up with an earnings beat this time around:
Ferroglobe PLC (GSM - Free Report) has an Earnings ESP of +61.77% and a Zacks Rank #3. The company’s fourth-quarter 2017 financial results are expected to be released on Mar 15. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sonic Automotive, Inc. (SAH - Free Report) has an Earnings ESP of +2.42% and a Zacks Rank #2. The company’s fourth-quarter 2017 financial results are expected to be released on Feb 27.
CarMax, Inc. (KMX - Free Report) has an Earnings ESP of +3.72% and a Zacks Rank #3. The company’s financial results are expected to be released on Apr 5.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>